By Rory J. O'Connor, San Jose Mercury News, Calif. Knight-Ridder/Tribune Business News

Mar. 31--A cyberspace civil liberties group launched a campaign Friday to try turning the Republican high-tech budget-cutting frenzy to its advantage by blocking funding for a controversial wiretap law.

The Electronic Privacy Information Center in Washington wants to persuade Congress not to allocate money to pay for the controversial ``digital telephony'' measure passed on a voice vote on the last day of the congressional session in 1994. The measure requires telephone companies to make their digital communications equipment accessible to wiretapping by law enforcement officials, as long as they obtain court permission.

Civil libertarians bitterly opposed the bill, saying it eviscerated the privacy offered by the modern switch to transmitting phone calls and other information digitally. Unlike older calls, which travel through ``analog'' phone networks as an easy-to-record continuous electrical signal, digital calls are technically much harder to tap. Thanks to computers, digital calls also can be scrambled far more easily and effectively than analog calls.

EPIC was one of the leading objectors to the law. It sued the government last year to obtain documents related to the proposal, formally known as the Communications Assistance for Law Enforcement Act of 1994.

The law had been a top priority for law enforcement, most notably the Federal Bureau of Investigation. The enforcers claimed digital transmissions were squelching their ability to conduct legal wiretaps on calls of suspected criminals, like drug dealers, terrorists and organized crime figures.

Hundreds of local phone companies also opposed it because of the huge cost to retrofit their old equipment to conform to the law. That opposition led Congress to add a provision to the legislation authorizing paying the companies $500 million over four years to do the job.

But that money has yet to be funded. Without it, opponents hope the law will fall apart.

``The phone companies said $500 million wasn't nearly enough,'' said EPIC director Marc Rotenberg. ``I think, given the choice, the phone companies would like to see this go away.''

EPIC said it wants to organize grass-roots opposition to the funding by providing on-line information about the law and urging people to contact their representatives to vote against any attempt to fund the law. It also set up an 800 number through Western Union to allow callers to send $10 Mailgrams to Congress in opposition.

EPIC hopes the messages will prove appealing to lawmakers, who are in a cost-cutting mood.

``This plan is deeply flawed,'' Rotenberg said. ``Not a dollar should be spent on this program.'' END!R$3?SJ-TELEPHONY

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